`[Federal Register Volume 89, Number 248 (Friday, December 27, 2024)]
[Notices]
[Pages 105790-105983]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-30493]



[[Page 105789]]

Vol. 89

Friday,

No. 248

December 27, 2024

Part III





Department of Energy





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Federal Energy Regulatory Commission





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Interregional Transfer Capability Study: Strengthening Reliability 
Through the Energy Transformation; Notice

  Federal Register / Vol. 89, No. 248 / Friday, December 27, 2024 / 
Notices  

[[Page 105790]]



DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission


Interregional Transfer Capability Study: Strengthening 
Reliability Through the Energy Transformation

Notice of Request for Comments

    On November 19, 2024, the North American Electric Reliability 
Corporation (NERC) submitted to the Federal Energy Regulatory 
Commission (Commission) an Interregional Transfer Capability Study (ITC 
Study) pursuant to section 322 of the Fiscal Responsibility Act of 2023 
(Fiscal Responsibility Act).\1\ On November 25, 2024, the Commission 
issued a Notice of Request for comments stating that all interested 
persons are invited to file comments on this ITC Study. This 
supplemental notice is issued to include the ITC Study and associated 
NERC transmittal letter.\2\ Comments should be filed no later than 60 
days after the date of publication of this supplemental notice in the 
Federal Register. We request the public to submit comments in the 
format indicated below.
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    \1\ Fiscal Responsibility Act of 2023, Public Law 118-5, 137 
Stat 10, sec. 322 (2023).
    \2\ The full text of this document is available on eLibrary in 
PDF and Microsoft Word formats (with color graphics) for viewing, 
printing, and/or downloading.
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    In June 2023, Congress passed the Fiscal Responsibility Act, which 
requires the Commission-approved Electric Reliability Organization 
(i.e., NERC),\3\ in consultation with each regional entity and each 
transmitting utility \4\ that has facilities interconnected with a 
transmitting utility in a neighboring transmission planning region, to 
conduct a study of total transfer capability \5\ between transmission 
planning regions. The Fiscal Responsibility Act requires the ITC Study 
to include:
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    \3\ Federal Power Act (FPA) section 215 provides that the 
Commission may certify an Electric Reliability Organization, the 
purpose of which is to develop mandatory and enforceable Reliability 
Standards, subject to Commission review and approval. 16 U.S.C. 
824o(c). The Commission subsequently certified NERC as the Electric 
Reliability Organization. N. Am. Elec. Reliability Corp., 116 FERC ] 
61,062, order on reh'g and compliance, 117 FERC ] 61,126 (2006), 
aff'd sub nom. Alcoa, Inc. v. FERC, 564 F.3d 1342 (D.C. Cir. 2009).
    \4\ Transmitting utility is defined in 16 U.S.C. 796 as ``an 
entity (including an entity described in section 824(f) of [title 
16]) that owns, operates, or controls facilities used for the 
transmission of electric energy--(A) in interstate commerce; (B) for 
the sale of electric energy at wholesale.''
    \5\ 18 CFR 37.6(b)(1)(vi) (2024).
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    (1) Current total transfer capability between each pair of 
neighboring transmission planning regions.
    (2) A recommendation of prudent additions to total transfer 
capability between each pair of neighboring transmission planning 
regions that would demonstrably strengthen reliability within and among 
such neighboring transmission planning regions.
    (3) Recommendations to meet and maintain total transfer capability 
together with such recommended prudent additions to total transfer 
capability between each pair of neighboring transmission planning 
regions.
    The Fiscal Responsibility Act requires NERC to submit the ITC Study 
to the Commission no later than 18 months after the date of enactment 
of the Act (i.e., by December 2, 2024). After the ITC Study is 
submitted to the Commission, the Commission must publish the study for 
public comment and, no later than 12 months after the end of the public 
comment period, submit a report on its conclusions to Congress and 
include recommendations, if any, for statutory changes.\6\
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    \6\ Fiscal Responsibility Act of 2023, Public Law 118-5, 137 
Stat 10, sec. 322 (2023).
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    Comments may be filed electronically via the internet.\7\ 
Instructions are available on the Commission's website http://www.ferc.gov/docs-filing/efiling.asp. For assistance, please contact 
FERC Online Support at [email protected] or toll free at 1-
866-208-3676, or for TTY, (202) 502-8659. Although the Commission 
strongly encourages electronic filing, documents may also be paper-
filed. To paper-file, submissions sent via the U.S. Postal Service must 
be addressed to: Federal Energy Regulatory Commission, Office of the 
Secretary, 888 First Street NE, Washington, DC 20426. Submissions sent 
via any other carrier must be addressed to: Federal Energy Regulatory 
Commission, Office of the Secretary, 12225 Wilkins Avenue, Rockville, 
Maryland 20852.
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    \7\ See 18 CFR 385.2001(a)(1)(iii) (2024).
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    For more information about this Notice, please contact Jessica L. 
Cockrell at [email protected] or 202-502-8190. For legal 
information, please contact Gonzalo E. Rodriguez at 
[email protected] or 202-502-8568.

    Dated: December 17, 2024.
Debbie-Anne A. Reese,
Secretary.

Requested Format for ITC Study Comments

    We request that commenters use the following format, based on the 
correlated headings in the ITC Study submittal, to indicate which 
aspects of the submittal are being addressed in a comment. Commenters 
need not address all headings outlined below.

Appendix A: Interregional Transfer Capability Study 2024

A. Chapter 1: The Reliability Value of Transfer Capability
B. Chapter 2: Overview of ITC Study Scope and Terminology
    1. ITC Study Scope
    2. Stakeholder Participation
    3. General Comments on the ITC Study Scope and Terminology
C. Transfer Capability Analysis (Part 1)
    1. Chapter 3: Transfer Capability (Part 1) Study Process
    2. Chapter 4: Transfer Capability (Part 1) Study Results
    3. Other Comments on the Transfer Capability Analysis (Part 1)
D. Recommendations for Prudent Additions To Transfer Capability 
(Part 2) and Recommendations To Meet and Maintain Transfer 
Capability (Part 3)
    1. Chapter 5: Prudent Additions (Part 2) Inputs
    2. Chapter 6: Prudent Additions (Part 2) Process, Including 
Energy Margin Analysis Results
    3. Chapter 7: Prudent Additions (Part 2) Recommendations
    4. Chapter 8: Prudent Additions (Part 2) Sensitivity Analysis
    5. Chapter 9: Prudent Additions (Part 2) Transmission Planning 
Region-Specific Results
    6. Chapter 10: Meeting and Maintaining Transfer Capability (Part 
3)
    7. Other Comments on Prudent Additions (Part 2)
    8. Other Comments on Meeting and Maintaining Transfer Capability 
(Part 3)
E. Future Work
F. ITC Study Appendices (A-J)
G. Additional Comments Outside the Specific Report Sections

United States Of America Before the Federal Energy Regulatory 
Commission

North American Electric Reliability Corporation, Docket No. _____

North American Electric Reliability Corporation

Interregional Transfer Capability Study as Directed in the Fiscal 
Responsibility Act of 2023

Candice Castaneda, Senior Counsel, North American Electric 
Reliability Corporation, (202) 400-3000, [email protected].

Counsel for the North American Electric Reliability Corporation.

    November 19, 2024.

Table of Contents

I. Executive Summary
I. Introduction to NERC and the ERO Enterprise
II. Overview of the Interregional Tranfer Capability Study
    a. Calculating Current Total Transfer Capability

[[Page 105791]]

    b. Identifying Prudent Additions to Transfer Capability to 
Demonstrably Strengthen Reliability
    c. Recommendations To Meet and Maintain Sufficient Transfer 
Capability
III. Consultation With Regional Entities and Transmitting Utilities
IV. Conclusion
Appendix A--Interregional Transfer Capability Study 2024
Appendix B--List of Stakeholder Engagement Activities
Appendix C--Letters to Transmitting Utilities Regarding 
Interregional Transfer Capability Study
Appendix D--Advisory Group Roster, ITCS Study Team Roster, and 
Schedule of Monthly Public Advisory Group Meetings

United States of America Before the Federal Energy Regulatory 
Commission

North American Electric Reliability Corporation, Docket No. _____

North American Electric Reliability Corporation

Interregional Transfer Capability Study as Directed in the Fiscal 
Responsibility Act of 2023

    The North American Electric Reliability Corporation (``NERC'') 
respectfully submits the Interregional Transfer Capability Study 
(``ITCS'' or ``Study'') directed by the United States (``U.S.'') 
Congress in the Fiscal Responsibility Act of 2023 (``Fiscal 
Responsibility Act'') for Federal Energy Regulatory Commission 
consideration.\8\ The ITCS was prepared by NERC as the Electric 
Reliability Organization (``ERO'') \9\ in consultation with NERC's 
six Regional Entities (together with NERC, the ``ERO Enterprise'') 
\10\ and transmitting utilities.
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    \8\ Fiscal Responsibility Act, H.R. 3746 (2023) [hereinafter 
Fiscal Responsibility Act]. See Section 322 of the Fiscal 
Responsibility Act (providing, ``The Electric Reliability 
Organization . . . in consultation with each regional entity . . . 
and each transmitting utility (as that term is defined in section 
3(23) of such Act) that has facilities interconnected with a 
transmitting utility in a neighboring transmission planning region, 
shall conduct a study of total transfer capability as defined in 
section 37.6(b)(1)(vi) of title 18, Code of Federal Regulations, 
between transmission planning regions that contains the following:
    (1) Current total transfer capability, between each pair of 
neighboring transmission planning regions.
    (2) A recommendation of prudent additions to total transfer 
capability between each pair of neighboring transmission planning 
regions that would demonstrably strengthen reliability within and 
among such neighboring transmission planning regions.
    (3) Recommendations to meet and maintain total transfer 
capability together with such recommended prudent additions to total 
transfer capability between each pair of neighboring transmission 
planning regions.'').
    \9\ Rules Concerning Certification of the Electric Reliability 
Organization; and Procedures for the Establishment, Approval, and 
Enforcement of Electric Reliability Standards, Order No. 672, 114 
FERC ] 61,104, order on reh'g, Order No. 672-A, 114 FERC ] 61,328 
(2006) [hereinafter Order No. 672]. NERC was certified by the 
Commission as the ERO, pursuant to Sec.  215(c) of the Federal Power 
Act (``FPA''), by Commission order issued July 20, 2006. Order 
Certifying the North American Electric Reliability Corporation as 
the Electric Reliability Organization and Ordering Compliance 
Filing, 116 FERC ] 61,062 (2006) [hereinafter NERC ERO Certification 
Order].
    \10\ The Regional Entities are (i) Midwest Reliability 
Organization (``MRO''); (ii) Northeast Power Coordinating Council, 
Inc. (``NPCC''); (iii) ReliabilityFirst Corporation 
(``ReliabilityFirst''); (iv) SERC Reliability Corporation 
(``SERC''); (v) Texas Reliability Entity, Inc. (``Texas RE''); and 
(vi) Western Electricity Coordinating Council (``WECC''). Please 
note, unless otherwise defined herein, all capitalized terms should 
be assigned the meanings reflected in the NERC Glossary posted on 
NERC's website.
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    Over the past 15 months, NERC has developed the attached ITCS 
(Appendix A) in consultation with stakeholders to provide:
    (i) Current total transfer capability (``TTC'' or ``transfer 
capability'') between each pair of neighboring transmission planning 
regions in the U.S.; \11\
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    \11\ In addition, results that include transfer capabilities 
between the U.S. to Canada and between Canadian provinces is planned 
for the first quarter of 2025. While evaluating Canada is outside 
the specific congressional mandate, the interconnectedness of the 
North American BPS warrants analysis of Canada.
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    (ii) Recommendations for technically prudent additions to TTC 
between pairs of neighboring transmission planning regions where 
these additions would demonstrably strengthen reliability; \12\
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    \12\ Prudence means whether the recommendations are the type 
that a reasonable entity would make in good faith under the same 
circumstances, and at the relevant point in time. See infra Section 
II.b. The ITCS is not an evaluation of economics, siting, or 
environmental impacts.
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    (iii) Recommendations on how to meet and maintain TTC now and as 
enhanced in response to the ITCS findings.
    As stated herein and detailed in the attached materials, the 
ITCS is the first-of-its-kind assessment of transmission transfer 
capability under a common set of assumptions.\13\ Transmission 
assessments, like the ITCS, are crucial to mitigating future risks 
to Bulk Power System (``BPS'') reliability, although other 
approaches beyond transmission (such as local generation or demand-
side solutions) can also mitigate future energy risks. The ITCS 
focuses on transfer capability in accordance with the congressional 
directive, while acknowledging that other processes and pending 
projects may help support a reliable future grid. The ITCS is not 
designed to be a transmission plan or blueprint.
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    \13\ Transfer capability or ``TTC'' is the amount of electric 
power that can be moved or transferred reliably from one area to 
another area of the interconnected transmission system by way of all 
transmission lines (or paths) between those areas under specified 
system conditions. 18 CFR 37.6(b)(1)(vi).
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    The ITCS demonstrates that sufficient transfer capability and 
resources exist at present to maintain energy adequacy under most 
scenarios. As discussed below and in the attached ITCS, however, 
when calculating current transfer capability and projected future 
conditions,\14\ the ITCS identifies potential energy inadequacy 
across several transmission planning regions in the event of extreme 
weather. This finding confirms congressional and electric industry 
concerns that North American transmission infrastructure may become 
insufficient to maintain energy adequacy when considering the 
changing resource mix, extreme weather events, and increasing 
demand. Therefore, using the assumptions underlying the analysis, 
the ITCS recommends an increase of 35 GW of transfer capability 
across different regions as technically prudent additions to 
demonstrably strengthen reliability. The ITCS bases its analysis of 
prudence and the extent to which recommendations would demonstrably 
strengthen reliability according to the anticipated impact of the 
recommendations on BPS reliability in terms of energy adequacy. 
Further, the ITCS recommends region-specific enhancements to 
transfer capability, because a one-size-fits all approach across the 
U.S. may be inefficient and ineffective.
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    \14\ Via an energy margin analysis that uses a ten-year forward-
looking case that accounts for extreme weather, resources, and 
demand growth as described below and detailed in Appendix A.
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    The ITCS is an essential element of the continuing transmission 
discussion in North America. The ITCS demonstrates a significant 
opportunity to improve the use of surplus resources when they are 
available during extreme weather events and shows how interregional 
transmission can maximize the use of local resources, including 
storage and demand response. Further, it highlights the continuing 
importance of integrated transmission and resource planning, as 
increasing transfer capability without surplus available energy 
would be inefficient. NERC looks forward to the Commission's 
proceeding to examine the ITCS, opportunities identified therein, 
and stakeholder comments in anticipation of the Commission's report 
to U.S. Congress.

I. Executive Summary

    The Bulk Power System is a complex grid that has evolved over 
the past several decades to include an integrated network of 
generation, transmission, and distribution across vast geographic 
areas. NERC is focused on assuring the reliability of the BPS 
throughout the ongoing North American energy transformation. As the 
grid modernizes, governmental authorities and the electric industry 
are rising to the challenge to ensure that continued reliability 
accompanies that growth.
    On June 3, 2023, the President signed into law the Fiscal 
Responsibility Act in which Congress (as part of measures associated 
with the debt ceiling) required NERC to conduct an assessment by 
December 2, 2024 of the total transfer capability between 
transmission planning regions.\15\ The resulting ITCS analyzes the 
amount of energy that can be moved or transferred reliably from one 
area to another area of the interconnected transmission systems. 
This transfer capability is a measure of the system's ability to 
address energy deficiencies by relying on resources in neighboring 
regions and is a key component of a reliable and resilient BPS. 
Recent and

[[Page 105792]]

continuing resource mix changes require greater access and 
deliverability of resources between neighboring systems to maintain 
reliability, particularly during widespread, extreme weather 
conditions.
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    \15\ Supra note 1.
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    Ensuring a transmission system with sufficient transfer 
capability between transmission planning regions is important to 
support energy adequacy. In the interest of public health, safety, 
and security, the electric industry must continue advancing improved 
planning to support reliable energy supplies under an evolving grid 
with more frequent extreme weather conditions. As a result of the 
changing resource mix and extreme weather, interregional energy 
transfers play an increasingly pivotal role.\16\ NERC assessments 
and experiences during recent events, such as the Western 
Interconnection Heatwaves of 2020 and 2022, Winter Storm Uri in 
2021, and Winter Storm Elliott in 2022, demonstrate that action is 
warranted to support energy adequacy going forward. More transfer 
capability and a carefully planned resource mix are desirable to 
address these identified challenges (such as extreme weather, 
existing resource retirements,\17\ and natural gas reliance), as 
well as the ongoing electrification of the economy with its growing 
transportation sector, industrial loads, and data centers. The ITCS 
is an integral part of that discourse by providing an independent, 
reliability-focused assessment of the extent of transfer capability 
across the transmission system and opportunities to harness that 
potential as we collectively prepare for the future.
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    \16\ An explanation of the grid can be found on the U.S. Energy 
Information Administration website. U.S. Energy Information 
Administration, Electricity Explained (Mar. 26, 2024), https://www.eia.gov/energyexplained/electricity/ (including detailed 
subtopics under ``Also in Electricity Explained'').
    \17\ See Appendix A, ITCS at p. 1 and Chapter 11 (summarizing 
ITCS limitations and potential further considerations).
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    In the first part of the ITCS, NERC calculates current transfer 
capability in a manner that combines base transfer levels together 
with first contingency incremental transfer capability for each of 
the winter and summer seasons, (see infra Section II.a.). Based on 
these calculations, NERC determines that transfer capability varies 
widely across North America with import capability anywhere between 
1% to 92% of the associated peak loads. The ITCS shows that transfer 
capability varies seasonally, regionally, and under different system 
conditions. The ITCS also generally finds lower transfer capability 
in the Mountain States, Great Plains, Southwest, and Northeast, with 
greater capability in the West Coast, Great Lakes, and Mid-Atlantic 
areas. The magnitude of transfer capability is not itself a measure 
of energy adequacy, however, these findings informed the second part 
of the ITCS.
    The second part of the ITCS contains an energy margin analysis 
that enabled NERC to identify whether a particular transmission 
planning region would be at risk for energy inadequacy considering 
the calculated TTCs and extreme weather events. The ITCS 
characterizes this risk for energy inadequacy as a ``deficiency.'' 
In each scenario where the ITCS identifies a deficiency in a 
transmission planning region, NERC further applied a six-step 
process to examine the extent to which additional transfer 
capability could mitigate that deficiency and thereby demonstrably 
strengthen reliability.\18\ The Part 1 TTC calculation (which 
includes simultaneous import capability analysis) together with the 
Part 2 prudent additions analysis (which includes energy margin 
analysis of past weather events applied to the projected resource 
mix and demand) ensure the reasonableness and therefore prudence of 
ITCS recommended additions to transfer capability. The last part of 
the ITCS provides recommendations to meet and maintain transfer 
capability. The resulting recommendations identify directional 
(rather than prescriptive) guidance for policymakers and industry. 
The ITCS provides a roadmap for understanding where it may be 
beneficial to enhance transmission to support a reliable future 
grid, without mandating specific projects or a minimum level of 
transfer capability.
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    \18\ The energy margin analysis (which identified the 
deficiencies) constitutes steps 1 and 2 of the 6-step process.
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    The ITCS is a unique assessment centered on reliability. 
Transmission planners, regional transmission organizations/
independent system operators (``RTOs/ISOs''), and policymakers might 
consider other factors such as economics, environmental effects, and 
broader policy objectives when deciding which solutions to implement 
to address reliability issues. Different markets, RTOs/ISOs, or 
regions of the U.S. may have different approaches to evaluate 
transfer capability and prudent additions thereto. The ITCS, for 
example, in some instances subdivided RTO/ISO and Commission Order 
No. 1000 areas to avoid masking issues between neighboring 
transmitting utilities within the scope of the Congressional 
directive. The ERO Enterprise approach was specifically designed to 
evaluate TTC and potential prudent additions to transfer capability 
that would demonstrably strengthen reliability without regard to 
specific market structures, economic considerations, or policy 
matters in the expectation that the Commission, U.S. Congress, 
States, and industry will use NERC's ITCS as part of this broader 
evaluation.
    Based on the analysis in Part 2 of the ITCS, NERC identifies 
that in the present year, there are relatively few deficiencies 
across transmission planning regions. As a result, the ITCS suggests 
that existing infrastructure is generally sufficient at this time to 
maintain energy adequacy under most scenarios (barring severe 
conditions such as limitations on gas generation performance during 
cold weather and natural gas production and transportation 
challenges for electric generators). This conclusion also 
establishes 2024 as a useful reference point for future comparisons.
    Nevertheless, when examining the ten-year forward-looking case 
that accounts for the future resource mix and forecasted load, 
energy inadequacy was identified across almost half of the studied 
transmission planning regions.\19\ This confirms congressional and 
electric industry concern that, given the changing resource mix, 
extreme weather, and anticipated demand, transmission infrastructure 
may place a strain on energy adequacy in the future. As a result, 
based on calculated deficiencies and the broader six-step approach 
to identify prudent additions to demonstrably strengthen 
reliability, the ITCS recommends 35 GW of additional transfer 
capability across different areas of the U.S. As discussed in 
Section II.b. below, transmission planning regions across North 
America would benefit from increased transfer capability. Since the 
needed import capability, as analyzed, varied significantly across 
the U.S., a one-size fits all requirement or approach to additional 
transfer capability is expected to be inefficient and ineffective. 
The increased transfer capability recommended in the ITCS, in 
addition to other measures outside of its scope, such as resource 
adequacy and fuel assurance, would demonstrably improve energy 
adequacy under reasonably anticipated extreme conditions.\20\
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    \19\ Specifically, 11 out of 23 transmission planning regions.
    \20\ NERC highlights that transmission and TTC are part of a 
more expansive equation underlying energy adequacy in a modern grid, 
which includes matters such as available generation. The ITCS 
relies, for example, on future resource assumptions. If these change 
it could impact the energy margin analysis underlying the Part 2 
analysis.
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    Part 3 of the ITCS also provides recommendations how to meet and 
maintain transfer capability. See infra Section II.c. These 
recommendations should be taken, together with remainder of the 
ITCS, as foundational insights for further discussions and decisions 
on regulatory and legislative solutions. Planners, for example, 
should consider conditions impacting their systems and those of 
neighboring transmitting utilities while also considering resource 
adequacy.\21\ The ITCS also does not evaluate particular projects. 
Rather, under a holistic approach, the Study recommends how much 
additional transfer capability at each interface would strengthen 
the grid.
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    \21\ Please see the ITCS for discussion of additional factors 
that stakeholders may analyze.
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I. Notices and Communications

    Notices and communications with respect to this filing may be 
addressed to:

Sonia Rocha, Senior Vice President, General Counsel, and Corporate 
Secretary, North American Electric Reliability Corporation, 1401 H 
Street NW, Suite 410, Washington, DC 20005, 202-400-3000 office, 
[email protected]
Candice Castaneda, Senior Counsel, North American Electric 
Reliability Corporation, 1401 H St. NW, Suite 410, Washington, DC 
20005, 202-400-3000, [email protected]

I. Introduction to NERC and the ERO Enterprise

    Electricity is a key component of the fabric of modern society. 
NERC's mission is to assure the effective and efficient reduction of 
risks to the reliability and security of the grid. The vision of the 
ERO Enterprise is a

[[Page 105793]]

highly reliable and secure North American BPS. The Regional Entities 
help NERC support reliability across various interconnections with 
differing needs and characteristics.\22\
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    \22\ NERC's relationship with the Regional Entities is governed 
by Regional Delegation Agreements or ``RDAs'' filed with the 
Commission every five years. 18 CFR 39.8. A delegation agreement 
shall not be effective until it is approved by the Commission. See 
also, N. Am. Elec. Reliability Corp., 133 FERC ] 61,061 (2010), 
order denying reh'g, 134 FERC ] 61,179 (2011), order on compliance 
filing, 137 FERC ] 61,028 (2011). N. Am. Elec. Reliability Corp., 
153 FERC ] 61,135 (2015) (approving pro forma and individual RDAs, 
subject to compliance filing) and N. Am. Elec. Reliability Corp., 
Docket No. RR15-12-001 (Mar. 23, 2016) (delegated letter order) 
(accepting final pro forma and individual RDAs) (collectively ``2015 
RDA Order''); and Order Conditionally Approving Revised Pro Forma 
Delegation Agreement and Revised Delegation Agreements with Regional 
Entities, 173 FERC ] 61,277 (2020).
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    When Congress enacted the Energy Policy Act of 2005 \23\ and 
section 215 of the Federal Power Act, it entrusted the Commission 
with: (i) approving and enforcing rules to ensure the reliability of 
the BPS; and (ii) certifying an ERO that would be charged with 
developing and enforcing mandatory Reliability Standards, subject to 
Commission approval, and with assessing reliability and adequacy of 
the BPS in North America.\24\ Section 215 and Commission regulation 
reflect certification of an ERO subject to Commission oversight.\25\ 
In 2006, the Commission certified NERC as the ERO.\26\
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    \23\ Public Law 109-58, title XII, Sec.  1211(b), Aug. 8, 2005, 
119 Stat. 946.
    \24\ 16 U.S.C. 824o(a)(2). See also Sec.  824o(c) (providing the 
ERO certification criteria). See also Public Law 109-58, title XII, 
Sec.  1211(b), Aug. 8, 2005, 119 Stat. 946 (clarifying, ``[t]he 
Electric Reliability Organization. . . and any regional entity 
delegated enforcement authority. . . are not departments, agencies, 
or instrumentalities of the United States Government.'').
    \25\ Order No. 672 at PP 183-191.
    \26\ See NERC ERO Certification Order.
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    Consistent with NERC's responsibility to ``conduct periodic 
assessments of the reliability and adequacy of the bulk-power system 
in North America'' \27\ such as NERC's Long-Term Reliability 
Assessment (``LTRA''), Summer Assessment, Winter Assessment, and 
special assessments, the Fiscal Responsibility Act tasked NERC with 
preparing the ITCS in consultation with the Regional Entities and 
transmitting utilities.
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    \27\ 16 U.S.C. 824o(g).
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II. Overview of the Interregional Tranfer Capability Study

    The Fiscal Responsibility Act requires the ERO, in consultation 
with the Regional Entities and transmitting utilities with 
facilities neighboring another in a neighboring transmission 
planning region (referred to generally as ``neighboring transmitting 
utilities''), to conduct a study of total transfer capability (also 
known as ``TTC'') between transmission planning regions that 
contains:
    (1) Current total transfer capability between each pair of 
neighboring transmission planning regions.
    (2) A recommendation of prudent additions to total transfer 
capability between each pair of neighboring transmission planning 
regions that would demonstrably strengthen reliability within and 
among such neighboring transmission planning regions.
    (3) Recommendations to meet and maintain total transfer 
capability together with such recommended prudent additions to total 
transfer capability between each pair of neighboring transmission 
planning regions.\28\
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    \28\ Supra note 1.
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    Consistent with NERC's collaborative process and congressional 
directive, the ITCS was prepared over a 15-month period with 
significant stakeholder engagement, as discussed in Section III 
below and reflected in Appendices B through D. The ITCS examined 
current TTC as Part 1 of the analysis. Part 2 of the Study completed 
an energy margin analysis that compared TTC against 12 weather years 
(including extreme weather) to identify transmission planning region 
energy deficiencies that warrant prudent additions to TTC to 
demonstrably strengthen reliability.\29\ As Part 3 of the ITCS, the 
ITCS recommended methods to meet and maintain current TTC and 
enhanced TTC. These recommendations interpreted the ITCS as part of 
the broader discourse between the Commission, U.S. Congress, States, 
other policymakers, and the electric industry to leverage the ITCS 
findings along with more specific regional, policy, market, 
economic, and environmental considerations. Finally, the ERO 
Enterprise plans to continue regular assessments of transfer 
capability that will consider the latest developments in resource 
mixes, transmission infrastructure, new load projections, and 
changing weather and climate patterns.
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    \29\ The 12 weather years to ensure the ITCS examined extreme 
weather were selected from 2007-2023 and are non-contiguous.
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a. Calculating Current Total Transfer Capability

    In accordance with the Fiscal Responsibility Act, the 
fundamental question of the ITCS is the ability of the BPS to 
support transfers of energy between transmission planning regions 
when needed to ensure adequate energy to meet demand. The first 
required component of the ITCS is calculating current transfer 
capability, or TTC, between pairs of neighboring transmission 
planning regions.\30\
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    \30\ Supra note 1.
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    To calculate TTC, the ITCS study team, comprised of ERO 
Enterprise staff and consultants, first determined appropriate 
transmission planning regions for purposes of the Study after 
coordinating with the ITCS Advisory Group. To establish transmission 
planning regions for purposes of the Study, NERC, working with the 
Regional Entities, selected a set of interfaces that included all 
pairs of neighboring transmission planning regions to enable the 
ITCS performance of transfer analysis from source (exporting) region 
to sink (importing), and vice versa. Only electrically connected 
neighboring systems were evaluated to identify the transmission 
planning regions for purposes of Part 1 of the ITCS.\31\ The ITCS 
regions were smaller than the Commission's Order No. 1000 regions 
and those that RTOs/ISOs might use to provide a more granular 
analysis of potential TTC limitations and to enable the ITCS to 
identify key constraints to interregional TTC.
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    \31\ Some geographic neighbors that were not electrically 
connected were evaluated as potential new connections in Part 2 of 
the ITCS as NERC evaluated potential recommendations to enhance 
transfer capability.
---------------------------------------------------------------------------

    As reflected in NERC's August 2024 posted materials, the 
transmission planning regions were established as follows:

[[Page 105794]]

[GRAPHIC] [TIFF OMITTED] TN27DE24.052

    After the identification of transmission planning regions, the 
ITCS calculated TTC according to the following steps: \32\
---------------------------------------------------------------------------

    \32\ See ITCS Appendix A (providing detailed explanation on the 
Study and its design).
---------------------------------------------------------------------------

    (i) Select base cases using relevant Eastern Interconnection and 
Western Interconnection base cases created through Reliability 
Standard MOD-032-1 processes; \33\
---------------------------------------------------------------------------

    \33\ Base cases are computer models that simulate the behavior 
of the electrical system under various conditions as a snapshot in 
time. Base cases were not required for ERCOT and Qu[eacute]bec 
Interconnections for purposes of the ITCS as they were only tied 
with the Eastern Interconnection via dc ties. Also, small ERCOT dc 
ties to Mexico were omitted from evaluation and the ERCOT-Mexico 
interface was outside the scope of the document.
---------------------------------------------------------------------------

    (ii) Calculate TTC using Area Interchange method as the sum of 
base transfer levels together with first contingency incremental 
transfer capability; \34\
---------------------------------------------------------------------------

    \34\ Contingencies were based on NERC Reliability Standard TPL-
001-5.1 category P1 contingencies (100 kV and above).
---------------------------------------------------------------------------

    (iii) Adjust for facility monitoring criteria and thresholds to 
prevent undue limitation of transfer capability results based on 
heavily loaded, electrically distant elements to avoid the 
appearance of artificially constrained TTC;
    (iv) Ensure special interface considerations (such as pertinent 
remedial action schemes) are understood and properly reflected in 
study results; and
    (v) Analyze total import capabilities of each transmission 
planning region (although not required under the Fiscal 
Responsibility Act) as technically requisite to appropriately model 
system capability for purposes of the Part 2 analysis of any prudent 
enhancements to TTC.
    This analysis identified current TTC as illustrated in the maps 
discussed in more detail in the ITCS at Appendix A. These TTC 
results are highly dependent on the base cases and modeling 
assumptions described in the ITCS. The ITCS did not attempt to 
optimize dispatch or topology to maximize TTC, just as it also was 
designed to avoid underestimating TTC. The ITCS used the steps 
highlighted above to avoid the appearance of artificially 
constrained TTC.\35\
---------------------------------------------------------------------------

    \35\ As this is a study, observed TTC may differ from the 
conclusions in the ITCS based on operational conditions.
---------------------------------------------------------------------------

    The ITCS found that transfer capability varies seasonally and 
under different system conditions that limit transmission loading so 
that it cannot be represented by a single number. Transfer 
capability also varies widely across North America, with total 
import capability between 1% and 92% of peak load. Transfer 
capabilities were observed as generally higher in the West Coast, 
Great Lakes, and mid-Atlantic areas, while relatively lower in the 
Mountain States, Great Plains, Southeast, and the Northeast regions. 
In addition, the ITCS found limited transfer capability between 
Interconnections (Western Interconnection, Eastern Interconnection, 
ERCOT Interconnection (``ERCOT''), and Qu[eacute]bec). As NERC 
discussed these Part 1 results with industry during the Summer of 
2024, it explained that the findings suggested that Part 2 analysis 
would probably identify prudent additions to TTC to strengthen 
reliability. NERC underscored that the magnitude of transfer 
capability is not itself a measure of energy adequacy. Rather, the 
identified TTC provides the foundation for subsequent energy margin 
analysis in Part 2 of the ITCS.

b. Identifying Prudent Additions to Transfer Capability to 
Demonstrably Strengthen Reliability

    The Fiscal Responsibility Act requires NERC to consider and 
recommend prudent additions to TTC ``between each pair of 
neighboring transmission planning regions that would demonstrably 
strengthen reliability within and among such neighboring 
transmission planning regions.'' \36\ For the purposes of 
determining a ``prudent addition,'' NERC looked to the standard used 
in Commission precedent in electric utility ratemaking proceedings, 
which provides that ``prudence'' means a determination of whether 
(1) a reasonable entity (2) would have made the same decision, (3) 
in good faith, (4) under the same circumstances, and (5) at the 
relevant point in time.
---------------------------------------------------------------------------

    \36\ Supra note 1.
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    Determining exactly how much additional transfer capability is 
``prudent'' can depend on the totality of factors and circumstances. 
For example, as part of examining the totality of circumstances, the 
Commission has considered matters such as whether activities

[[Page 105795]]

have enhanced the ability to restore service, achieved significant 
efficiencies, reduced costs or time delays, and/or made efficient 
use of resources to ensure reliability.\37\ As discussed immediately 
below, NERC applied a six-step process to ensure that the ITCS's 
tailored recommendations for prudent additions to transfer 
capability for certain pairs of neighboring transmission planning 
regions are those that a reasonable entity would have made in good 
faith under the same circumstances and at the same point in time 
considering reliability of the system as the driving factor.
---------------------------------------------------------------------------

    \37\ See, e.g., New England Power Co., 31 FERC ] 61,047 at 
61,084 (1985); and Potomac-Appalachian Transmission Highline, LLC, 
140 FERC ] 61,229 at P 82 (Sept. 20, 2012).
---------------------------------------------------------------------------

    NERC underscores that nothing in the ITCS should be used as 
justification for a particular project and that no part of the ITCS 
is intended as evidence regarding prudence in any ratemaking 
proceeding. The ITCS does not include economic assessments, project-
specific recommendations, transmission expansion analysis, 
operational mitigation or capacity expansion planning. A holistic 
view of the BPS and a thorough understanding of its behavior will be 
essential when calculating or increasing transfer capability.
    The ITCS particularly examined the extent to which recommended 
enhancements would be reasonably expected to demonstrably strengthen 
reliability of the BPS. To do so, the ITCS examined whether the 
potential recommendation would strengthen reliability, serve load 
under extreme conditions, and avoid creating unintended reliability 
concerns as follows:
    1. Strengthen Reliability: Provides a potential solution that 
enables more flexibility between transmission planning regions and 
access to resources that may be available during local energy 
deficits.
    2. Serve Load Under Extreme Conditions: Provides a solution that 
serves future demand during extreme conditions, which is a more 
restrictive design basis than current resource adequacy constructs.
    3. Does Not Create Unintended Reliability Concerns: 
Recommendations for larger connections between transmission planning 
regions will require detailed system studies to assure system 
stability.
[GRAPHIC] [TIFF OMITTED] TN27DE24.053

    Under Part 2 of the ITCS, the ITCS conducted energy margin 
analysis of resource availability and interregional transfers across 
12-years of meteorological conditions and extreme weather data to 
examine whether the transfer capability calculated for a pair of 
neighboring transmission planning regions would be unable to meet 
energy needs under times of stress, being thus ``deficient'' and 
reflecting a risk of energy inadequacy for those regions.
    As a result, where the ITCS energy margin analysis found a 
deficiency and corresponding risk, NERC led a further layer of study 
that applied several considerations and criteria under a six-step 
process to evaluate whether, and how much, additional transfer 
capability would mitigate the potential risk of energy inadequacy 
created by the deficiency.
    The six-step process entails the following and is discussed in 
detail in Chapter 6 of the ITCS at Appendix A:

i. Identify hours of resource deficiency
ii. Quantify the maximum resource deficiency
iii. Prioritize constrained interfaces
iv. Allocate additional transfer capability
v. Iterate until resource deficiencies are mitigated
vi. Finalize prudent level of transfer capability

    A diagram of the analysis will help explain further:

[[Page 105796]]

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[[Page 105797]]


    The ITCS recommended prudent additions to transfer capability to 
the extent that results reflected that enhanced transfer capability 
would assuage the risk of energy inadequacy (as reflected by the 
deficiencies shown after energy margin analysis).
    In total, across various regions of the U.S., the ITCS 
recommends 35 GW of additional transfer capability to demonstrably 
strengthen reliability. These recommendations are detailed in the 
ITCS at Appendix A and break down according to the following table 
Table ES.1: \38\
---------------------------------------------------------------------------

    \38\ In two cases, it was not possible to eliminate all energy 
deficiencies, even by increasing transfer capability, due to wide-
area resource shortages. In ERCOT and California North, resource 
deficiencies remained even after increasing transfer capability by 
14 GW and 1 GW, respectively.
---------------------------------------------------------------------------

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[GRAPHIC] [TIFF OMITTED] TN27DE24.055

BILLING CODE 6717-01-C
    In making these recommendations, NERC acknowledges that transfer 
capability is only one part of the overall equation and that other 
elements such as generation resource availability, new load 
projections, additional weather information, and demand response 
should also be taken into account.\39\ Moreover, these 
recommendations do not account for economic, environmental, 
permitting or policy considerations that the Commission, U.S. 
Congress, other policymakers, and the electric industry may apply 
following the ITCS.
---------------------------------------------------------------------------

    \39\ Please see NERC's website for more information regarding 
these issues. See also, ITCS, Appendix A, Chapter 11 (providing 
further considerations). NERC has focused the ITCS on transfer 
capability in accordance with Congressional directive.
---------------------------------------------------------------------------

c. Recommendations To Meet and Maintain Sufficient Transfer 
Capability

    The final requirement of the Fiscal Responsibility Act of 2023 
is to develop recommendations to meet and maintain transfer 
capability together with recommended prudent additions.\40\ The ITCS 
provided recommendations to support transfer capability in the 
future without specifying a particular set of projects or approach. 
This recognizes that increased transfer capability is one of many 
options for addressing the identified energy deficiencies. Such 
options at a high level include:
---------------------------------------------------------------------------

    \40\ Supra note 1.

 Increase transfer capability to neighbors with surplus 
resources
 Construct local generation
 Increase demand response resources
 Accept the identified risks during extreme events (assuming 
other reliability thresholds are met)

    Timing for these approaches may vary, so further studies are 
needed for implementation. Grid operators must also be prepared to 
maintain BPS reliability through emergency measures (including 
rotating outages if necessary) meanwhile.
    If planners elect to increase transfer capability to meet the 
recommendations listed in the ITCS, options to consider include:
     Upgraded transmission infrastructure: Such as building 
new lines and reconductoring existing lines or raising existing 
tower structures where feasible.
     Remedial action schemes (``RAS''): Increasing transfer 
capability via adjustments to RAS may be helpful in the short-term 
while other solutions are implemented. RAS are not advised as a 
long-term solution as these schemes introduce higher operational 
complexity.
     Dynamic line ratings (``DLR''): DLR could use real-time 
and forecasted weather conditions to continuously calculate the 
thermal capacity of transmission lines and may at times facilitate 
increased transfer capability during favorable weather conditions. 
However, DLR may not be suitable in all situations.
     Power flow control devices: Power flow control devices 
with newer digital control

[[Page 105798]]

technology that allows for faster responses to system needs may help 
support transfer capability and enhance the transmission planning 
process.
    With regard to maintaining transfer capability, the ITCS 
explained that actual transfer capability available during real-time 
operations may be different from that calculated due to system 
conditions during actual operations. A certain level of transfer 
capability cannot always be maintained due to those changing system 
conditions and, therefore, the ITCS focused on what can be 
accomplished during the planning horizon. These recommendations to 
maintain transfer capability include:
     Coordination Agreements: Strong coordination procedures 
and agreements can maximize available support during stress 
conditions (such as extreme weather events). This coordination could 
include rigorous maintenance activities and coordinated maintenance 
to avoid overlapping with periods of increased stress.
     Future Studies:
    [cir] ERO Enterprise Studies: The ERO Enterprise, working with 
industry, is planning to conduct regular assessments rolled into 
future Long-Term Reliability Assessment reports that will consider 
developments in this area. NERC is also considering the issues as 
part of its Energy Assessment Strategy.
    [cir] Planning/Maintenance: Planners can evaluate changes in 
transfer capability as part of regular processes.
     Regulatory and Policy Mechanisms:
    [cir] The ITCS noted that a uniform minimum transfer capability 
requirement may not be an effective or efficient approach to ensure 
energy adequacy.
    [cir] The ITCS recommended that policy makers consider 
mechanisms to address existing challenges associated with siting/
permit approvals, cost-allocation, and multi-party operating and 
maintenance agreements.
     Reliability Standards:
    [cir] The ITCS clarified that it is not NERC's intent to develop 
Reliability Standard modifications to require entities to meet and 
maintain a certain transfer capability, without prejudice to NERC's 
consideration of modifications in the future of matters such as 
assessments associated with planned transfer capability.
    [cir] NERC has two standard development projects (Project 2022-
03 Energy Assurance with Energy-Constrained Resources and 2024-02 
Planning Energy Assurance) related to energy assurance and the 
assessment of energy adequacy.
    System studies are urged to ensure careful deployment of ITCS 
recommendations. To give these recommendations meaning, transmission 
planners and planning coordinators will need detailed studies to 
select projects or actions that take advantage of the opportunity 
identified in the ITCS without inadvertent consequences. The ITCS 
explained limitations on its scope as well as steps that 
stakeholders could take to further build on the opportunities 
identified therein.\41\ As highlighted throughout the ITCS and this 
filing, the ITCS is intended as a launch-pad to further North 
America's efforts to plan infrastructure and coordination that 
supports a modern grid.
---------------------------------------------------------------------------

    \41\ Without limitation on future analysis or action, NERC does 
not recommend any Reliability Standards changes at this time as a 
result of the ITCS.
---------------------------------------------------------------------------

    NERC urges policymakers and industry to carefully consider how 
to leverage the recommended additions to transfer capability 
outlined in the ITCS. As mentioned above, the recommendations 
identify directional, rather than prescriptive, guidance. The ITCS 
provides a roadmap for understanding where transmission may benefit 
from enhancement, without mandating specific projects or a minimum 
level of transfer capability. While the ITCS recommends increased 
transfer capability on particular interfaces, NERC does not endorse 
projects or particular approaches. This is intentional because 
planners must evaluate potential downstream impacts of increased 
transfer capability. For example, while greater transfer capability 
can improve energy adequacy, there can be situations where a large 
transfer of energy has consequences for other aspects of reliable 
system operations such as system stability, voltage control, and 
measures to minimize the potential for cascading outages. 
Transmission planning regions must coordinate system enhancements to 
support rational and effective implementation of the ITCS findings. 
Further, planners might consider other options not within the scope 
of the ITCS. While the ITCS focuses on transfer capability per 
congressional directive, regions might construct additional 
resources or increase demand response resources. Further, the ITCS 
acknowledges that existing or planned projects may also be 
responsive to the opportunities and recommendations identified in 
the ITCS. As stated above, the ITCS findings should be considered 
foundational insights for further discussions and decisions.

III. Consultation With Regional Entities and Transmitting Utilities

    The Fiscal Responsibility Act requires that NERC conduct the 
ITCS in consultation with the six Regional Entities and neighboring 
transmitting utilities.\42\ Consultation is understood as a 
meaningful exchange of information prior to final decision-
making.\43\ Consistent with Congressional directive and NERC's 
regular collaborative process as the ERO Enterprise coordinating 
with stakeholders to ensure reliability, NERC frequently consulted 
with the Regional Entities and transmitting utilities throughout the 
design and execution of the ITCS.
---------------------------------------------------------------------------

    \42\ Supra note 1.
    \43\ See, e.g., Envtl. Def. Ctr., Inc. v. U.S. Envtl. Protection 
Agency, 344 F.3d 832 (9th Cir. 2003) (highlighting that consultation 
was reflected by activities such as circulating a draft report to 
stakeholders, establishing an advisory committee, holding several 
meetings as part of that advisory committee, and obtaining input 
from State and municipal representatives on drafts); and South 
Carolina v. United States, 329 F. Supp. 3d 214 (2018) (finding that 
the Department of Energy engaged in a meaningful exchange of 
information and views with governor prior to the decision); cf. Cal. 
Wilderness Coalition v. U.S. Dep't of Energy, 631 F.3d 1072, 1087, 
1080, 1085) (2011) (explaining that consultation entails a 
meaningful exchange and more than public comment).
---------------------------------------------------------------------------

    As illustrated below, the stakeholder engagement process 
included 14 Advisory Group meetings, three letters to transmitting 
utilities seeking input and feedback, presentations at NERC Board of 
Trustee (``Board'') meetings and over 100 industry and trade group 
meetings. In addition, to facilitate these conversations and ongoing 
exchange of perspectives as NERC led the ITCS, NERC publicly 
published scoping documents and quarterly updates associated with 
the ITCS on NERC's ITCS web page. Further, NERC published the parts 
of the ITCS via a series of three reports (an introductory Overview 
report, transfer capability analysis Part 1 report, and prudent 
recommended additions to transfer capability Part 2 and 3 report) 
prior to finalizing and consolidating these portions into the 
attached ITCS (Appendix A).

[[Page 105799]]

[GRAPHIC] [TIFF OMITTED] TN27DE24.056

    This consultation process is consistent with the ITCS Framework 
that NERC published in the summer of 2023. That Framework 
established NERC's plan to engage with its executive leadership, 
Regional Entities across different levels of leadership and 
technical expertise, and industry. This plan included the ERO 
Enterprise's coordination with an ITCS Advisory Group comprised of 
diverse industry experts (including, for example, those from the 
Department of Energy (``DOE''), the Commission, and transmission 
planners from across the BPS), as well as additional outreach to 
transmitting utilities. See, Appendix B (list of stakeholder 
engagement activities), Appendix C (letters to transmitting 
utilities for feedback); and Appendix D (Advisory Group and ITCS 
Study Team Rosters and List of Public Meetings).

[[Page 105800]]

[GRAPHIC] [TIFF OMITTED] TN27DE24.057

    In accordance with the Framework illustrated above, NERC 
involved Regional Entities in the ITCS on a weekly basis to design 
and execute the ITCS and has met with the Advisory Group 
approximately every month to obtain input on ITCS design, execution, 
and findings. These groups were also asked to provide feedback on 
draft materials, such as the initial draft Framework, subsequent 
scope documents for different parts of the ITCS, and the portions of 
the ITCS that were rolled out in phases and culminated in the ITCS 
attached at Appendix A. All Advisory Group meeting presentations 
were publicly posted on NERC's ITCS web page. Comments from Advisory 
Group members on various parts of the ITCS were also posted on 
NERC's ITCS web page along with NERC's consideration and responses. 
The process ensured that NERC received input during each stage of 
the ITCS from its initial framing to more detailed scoping and 
throughout the ITCS while the ERO Enterprise study team examined the 
issues and finalized decisions.\44\
---------------------------------------------------------------------------

    \44\ Examples included the decision to study simultaneous import 
capability and use 2024/2025 system conditions (or ``base cases'') 
to calculate current total transfer capability.
---------------------------------------------------------------------------

    To maximize the opportunity for stakeholder consultation, NERC 
published draft portions of the ITCS on its web page (after seeking 
Advisory Group feedback) in stages. First, NERC published an 
Overview report introducing the ITCS and its approach in June 2024. 
Second, NERC published its calculated total transfer capability in 
August 2024. Third, in November 2024, NERC published its proposed 
recommended prudent additions to total transfer capability in 
certain regions of the U.S. and recommended means to meet and 
maintain transfer capability today and as enhanced after 
consideration of the ITCS recommendations. (Part 2 & 3 Report). 
These three parts were consolidated after final revisions into the 
attached ITCS (Appendix A). NERC plans to issue a fourth report in 
2025 studying transfer capabilities from the U.S. to Canada and 
between Canadian provinces.\45\
---------------------------------------------------------------------------

    \45\ While this part is outside the specific congressional 
mandate, the interconnectedness of the North American BPS warrants 
analysis of Canada.
---------------------------------------------------------------------------

    In addition, NERC sent three sets of letters to all transmitting 
utilities in 2024 to obtain feedback on the ITCS.\46\ The first 
letter was sent in January of 2024 seeking input generally on the 
ITCS, posted framework, and scope documents. The second letter was 
sent in September of 2024 to solicit input from transmitting 
utilities on the ITCS Overview report, total transfer capability 
report (Part 1), and Advisory Group materials (which included 
material on considerations and criteria to determine any recommended 
prudent additions to transfer capability). NERC's third letter to 
transmitting utilities was issued November 4, 2024, after the final 
in-person Advisory Group meeting, to solicit input on NERC's 
proposed recommended prudent additions and recommendations on how to 
meet and maintain current total transfer capability and transfer 
capability as enhanced by any additions (the Part 2 & 3 report). 
NERC's preliminary recommendations for prudent additions were also 
shared with the Advisory Group in September 2024 with publicly 
posted materials available on the ITCS web page to provide ample 
opportunity for comments before the Part 2 and 3 publication and 
before finalizing a final report.
---------------------------------------------------------------------------

    \46\ The Fiscal Responsibility Act required NERC to consult with 
neighboring transmitting utilities, however, to facilitate the 
broadest opportunity for consultation NERC sent these letters to all 
transmitting utilities.
---------------------------------------------------------------------------

    NERC takes this opportunity to thank all those stakeholders and 
members of the ERO Enterprise who participated in the ITCS. This 
feedback has been instrumental in developing a nuanced study that is 
unique in terms of its geographic magnitude and overall approach to 
assessing energy adequacy under extreme conditions.

IV. Conclusion

    Therefore, for the reasons set forth above, NERC hereby submits 
this ITCS to the Commission as directed by the U.S. Congress in the 
Fiscal Responsibility Act. The ITCS finds that while current total 
transfer capability is largely sufficient to support energy adequacy 
at present, when calculating energy margin analysis and extreme 
weather over a forward-looking ten-year outlook, there may likely be 
insufficient transfer

[[Page 105801]]

capability. Based on the identified deficiencies that reveal certain 
transmission planning regions at risk for energy inadequacy, the 
ITCS recommends 35 GW of additional total transfer capability as a 
prudent measure to demonstrably strengthen reliability subject to 
coordination between governmental authorities, policy makers, and 
industry. NERC also plans to continue evaluating transfer capability 
as a regular part of its assessments going forward such as the LTRA. 
NERC on behalf of itself and the full ERO Enterprise, looks forward 
to continuing to participate in this discourse and preparing North 
America to meet the needs of the modern grid.

    Respectfully submitted,

/s/Candice Castaneda

Candice Castaneda, Senior Counsel, North American Electric 
Reliability Corporation, 1401 H St. NW, Suite 410, Washington, DC 
20005, (202) 400-3000, [email protected].

Counsel for the North American Electric Reliability Corporation.

    Date: November 19, 2024.
BILLING CODE 6717-01-P
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[FR Doc. 2024-30493 Filed 12-26-24; 8:45 am]
BILLING CODE 6717-01-C`